Directive 065: Resources Applications for Oil and Gas Reservoirs ...

Requirements
Comments
production, you may make a comparison
between the actual produced volume from the
well and the volume the well should have
produced to obtain an equitable share of
production. You should present a detailed
calculation showing how you determined
your equitable share of production.
12) A discussion of the practicability, economics,
and any environmental concerns of
a) the proposed common processor
operation,
b) the alternative of building new facilities,
For each case, the economic analysis should
include a detailed itemization of all costs
(excluding sunk costs), forecasts of
production and revenue streams, and
tabulations of before-tax rate of return,
payback, and present value analyses.
c) the alternative of using other facilities
(such as taking the gas to another
existing plant), and
d) any other alternatives available.
13) A discussion of the availability or the
reasonable expectation of a market for your
gas that would be processed at the plant.
14) If you are requesting, pursuant to Section
53(5)(a) of the OGCA, that the ERCB, in
order to give effect to the common processor
declaration, direct the proportion of
production to be processed by the common
processor from each producer or owner in the
pool or pools,
a) a discussion and documentation
indicating what negotiations were carried
out in regard to distributing production
among wells in the pool and where the
impasse lies, and
b) a discussion of your proposal as to how
the ERCB should distribute production
from the pool, including a tabulation of
the proportion or percentage of total
production that each well or group of
wells should be allowed to produce,
together with the details of how the
proposed production scheme was
obtained.
The ERCB’s usual practice is to allocate
production among wells in a pool on a
percentage basis, rather than setting any
specific rate or volume. The proportion of
production allocated to each well is
commonly based on the following formula:
Percentage of pool production for specific
well = 100 x (wellbore net pay x porosity x
gas saturation x area of spacing unit or
validated area for specific well)/(sum of
wellbore net pay x porosity x gas saturation x
area of spacing units or validated areas for
all wells).
Directive 032 and Decision 91-8 offer
discussions of the ERCB’s commonly used
allocation formula and the validated area
concept. The ERCB has not generally used
mapping as a means to determine
hydrocarbon pore volume in a spacing unit
because in many cases such mapping is
highly interpretive. The ERCB has not
normally factored the deliverability of a well
1-26 • ERCB Directive 065: Resources Applications / Common Processor (October 2011)